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201007983
<br />IF the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA, Lender
<br />shall account to Borrower for the excess fiwds as required by RESPA. If the amounts of funds held by Lender at any
<br />time are not sufficient to pay the EseroW Items when due, Lender may notify the Borrower and require Barrower to
<br />make up the shortage as permitted by RESPA.
<br />The Escrow �'unds are pledged as additional security for all sums secured by this Seeurity Instrument. If
<br />Sorrower tenders to Lender thc full payment of all such sunns, Borrower's account shall be credited with the balance
<br />xemaining far all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender laas
<br />not become obligated to pay to the Secretary, and Lender sha11 promptly refund any excess funds to Borrower.
<br />Immediately prior to a foreclosure sale of the Property or its acquisition by T.,ender, Borrower's account shall be
<br />credited with any balance remaining for all installments for items (a), (b), and (c).
<br />3. Application of Payments. All payments under paragraphs 1 and 2 shall be applied by Lender as follows:
<br />First, to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthly charge by the
<br />Secretary instead of the manthly martgage insurance premium;
<br />Secon to any taxes, special assessments, leasehold payments or ground rents, and fire, flood and other hazard
<br />insurance premiurns, as required;
<br />Third, to interest due under the Note;
<br />Fourth, to amortization of the principal of th� Note; and
<br />Fifth, to late chargas due uuder the Note.
<br />4. Fire, Fluod and Other Hazard Insurance. Borrawer shall insure all improvements on the Property, whether
<br />now in existencc or subsequently erected, against any hazards, casualties, and contingencies, including fire, for which
<br />Lender requirea insurance. 1'his insurancc shall be maintained in the amounts and for the periods that Lender
<br />requires. Borrower shall also insure all improvements on the Property, whether now in existence or snbsequently
<br />erected, against loss by floods to the extent required by tha Sacretary. All insurance shall be carried with companies
<br />approved by L.ender. The insurance policies and any renewals shall be held by Lender and shall include loss payablc
<br />clauses in favor of, and in a form acceptable to, Lender.
<br />In the event of loss, Bortower shall giva Lender immediate notice by mail. Lender may make proof of loss if not
<br />made promptly by Sorrower. Each insurance company concerned is hereby authorized and directed to make payxr►ent
<br />Far such loss directly to Lender, instead of to Bortower and to Lender jointly. All or any part of the insurance
<br />proceeds may be applied by Lender, at its option, eithet (a) to the reduetion of the indebtedness under the Note and
<br />this Security Instrument, first to any delinqu�nt axnaunts applied in the arder in paragtaph 3, and then to prepayment
<br />of principal, or (b) to the restoration or repair of the damaged Froperiy. Any application of the proceeds to the
<br />principal shall not extend or postponc the due date of the monthly payments which are referred to in paragraph 2, or
<br />change the amount of such payments. Any excess insurance proceeds over an amount required to pay all outstanding
<br />indebtadaess under the Note and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />In the event of foreclasure of this Security Instnuxient or other transfer of title to the Property that extinguishes
<br />the indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall pass to the
<br />purchaser_
<br />5. Occupancy, Preservation, Mainte�ance and Pratectio� of the Property; Borrower's Loan Application;
<br />Leaseholds. Borrower shall occupy, establish, and use tha Praperty as Bottower's principal residence within sixty
<br />days after the execntion af this Security Instrument (or within sixty days of a later sala or transfer of the Property)
<br />and shall continue to occupy the Property as Sorrower's principal residence for at least one year after the date of
<br />occnpancy, unless Lender detarmines that requirement will cause undne hardahip for Borrower, or unless extenuating
<br />circumstances exist which are beyond Sorrower's control. Borrower shall notify Lender of any extenuating
<br />circumstances. Borrower shall not commit waste or destroy, damage or substantially change the Property or allow the
<br />Property to deteriorate, reasonable we�u' and tear excepted. Lender may inspect the Property if the Property is vacant
<br />at abandoned or the loan is in default. Lender may taka reasonable action to protect and preserve such vacant or
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